Financial advisor: There is no liquidity crisis and the government is proceeding with preparing the 2026 budget.
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed on Wednesday that there is no severe liquidity crisis in the short term, while indicating that the government is proceeding with the preparation of the 2026 budget within the medium-term framework of fiscal policy. The Prime Minister’s financial advisor, Mazhar Muhammad Salih, told the official agency that “governments usually resort to measures to reduce spending when facing pressures resulting from fluctuations in revenues or an increase in current obligations, especially in rentier economies that depend on a single resource such as oil.”
He also explained that “these measures come in light of fluctuating oil prices and increasing spending requirements, which necessitates discipline in managing liquidity.”
Regarding liquidity problems in the coming period, Saleh stressed that “the government is not expected to face a severe liquidity crisis in the short term, as long as oil revenues remain at their current levels and coordination between fiscal and monetary policies continues,” indicating that “continued pressure on operational spending may lead to a relative widening of the 2026 budget deficit, unless it is accompanied by controlling expenditures and strengthening non-oil revenues, especially tax and customs revenues.”
Regarding the preparation of the draft federal general budget law for 2026, he indicated that “the financial authority and the government have made significant progress in preparing it within the medium-term framework of fiscal policy,” expecting that “the draft will focus on achieving a balance between fiscal sustainability and development requirements.”
He added, “Initial indicators suggest that investment and service projects will remain at the forefront of priorities, especially those related to infrastructure, energy and basic services, which will enhance economic growth and alleviate social pressures, while simultaneously striving to rationalize operational spending and improve its efficiency.”
He also stressed that “the real challenge lies not in the size of the spending itself, but in its quality and efficiency, and in the ability of public finances to gradually move from the logic of crisis management to the logic of sustainable development planning.”
Burathanews.com